EDITORIAL: How to stop the student loan bailout

After offering struggling millennials a way to avoid being crushed by student loan debt, President Joe Biden no doubt envisioned he would be greeted by appreciative crowds throwing rose petals his way like he was an emperor in the city. Ancient Rome. Instead, the move has diminished his position among the electorate.

A Trafalgar Group poll conducted after Mr. Biden announced his bailout found that just under half of likely voters surveyed (49%) said they would be “much less likely” to vote for a candidate who spoke favorably about the issue. student loan forgiveness package. This provides a great opportunity for those who oppose the President’s plans for America to make a convincing case that he is not defending the interests of working Americans who play by the rules. Instead, he is trying to buy the votes of whiny youngsters who are hoping someone will fix the mess they got themselves into. Unfortunately, it doesn’t look like the opposition is doing much to press their advantage.

Mr. Biden’s bailout could cost taxpayers as much as $1 trillion, wiping out any supposed savings from the Inflation Reduction Act. Beltway experts don’t see a way to stop this and are giving up. As always, they are wrong. It can be stopped, but not in Washington.

The Principal Issues Doctrine recently codified by the Supreme Court suggests that a bailout of the size and scope proposed by the president must be approved by Congress. That’s something the courts could decide if an entity capable of suing can be found and persuaded to challenge Mr. Biden’s student loan bailout.

In an article recently published in the Journal of the National Association of Administrative Law Judges, Colin Mark of Harvard University wrote: “Student loan servicers could sue to prevent the Department of Education from forgiving student loans. The administrators could demonstrate an injury of fact, largely attributable to the Department’s forgiveness of student loans, and reparable by equitable compensation under § 702 of the APA.”

Enter Missouri and Oklahoma, conservative states with conservative governors and conservative majorities in their legislatures that oversee the boards that manage student loans. The Missouri State Higher Education Loan Authority or MOHELA, and the Oklahoma Student Loan Authority, also known as OSLA, are instruments of their respective states, governed by boards appointed by their governors whose members are subject to removal. for cause In short, they have the ability to sue.

Why would they? Biden’s plan could be very costly for them. He would write off a substantial amount of the loans they lend, depriving them of revenue from all 50 states used to fund scholarships for residents of Missouri and Oklahoma. It could also lead to significant tuition increases if the higher education price-fixing cartel leaders decide that this bailout is the first step in lowering the cost of college by allowing people to default on the money they borrowed. That makes fighting it critical to these entities’ college affordability mission.

Bringing a suit could be risky. Phil Kerpen of American Commitment, one of the main proponents of the lawsuit strategy, acknowledges that members of the two boards are rightly concerned that they could be locked out of the next round of loan servicing contracts awarded by the Department of US education, which begins even before the end. 2023 when current contracts expire if they challenge Biden’s plan for debt relief.

If so, it’s a risk worth taking. The idea that you’re supposed to pay back what you borrow, and that you’re not supposed to borrow more than you can pay back, is an intrinsic part of who we are as a nation. It is in the best interest of all of us that Governors Mike Parson of Missouri and Kevin Stitt of Oklahoma suggest to their appointees at these loan boards that they take a stand for what is right, no matter what the cost.

This should not be a scope. With 20 of their fellow Republican governors, Parson and Stitt co-signed a letter to the president published this month expressing their disagreement with his plan. If they have gone that far, they can go further by directing or persuading their appointees on the boards they oversee to sue. Maybe I’d put them on the list of people being talked about for a spot on the GOP’s next national ticket.

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